As you all now know, Boeing have once again dropped the ball with AAL and Airbus. I honestly don't follow Boeing's every move, but from my perspective, it seems some of their decision making the past few years has been questionable to say the least. Really questionable... Is it time for a shakeup in management and to bring in some new people?

Quoting sxf24 (Reply 2):How exactly was the ball dropped, besides not publicly communicating every move for the benefit of A.netters?

AA took 260 A320s over 100 737s. Now if this 737RE does well then it is not a huge ball drop as it would even out with 200 737s and 260 A320s. But for now they dropped the ball. They needed to have something ready for AA. And now they need to make sure WN and DL like the 737RE.

"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)

Quoting sxf24 (Reply 2):How exactly was the ball dropped, besides not publicly communicating every move for the benefit of A.netters?

A quote in another thread from the Boeing CEO comes to mind. He just recently had said:

"It's our judgment that our customers will wait for us, rather than move to an airplane that will obsolete itself when (Airbus) move(s) to a new airplane."

He also repeated his company's contention that Airbus was playing catchup to Boeing, saying: "The neo on paper closes the value gap that we have enjoyed. ...

"I feel pretty comfortable that we can defend our customer base both because they're not going ahead of us, they're catching up to us, and because we're going to be doing a new airplane that will go beyond the capability of what they neo could do."

This shows one of two things. Overconfidence or a total lack of understanding of the marketplace. This combined with the massive problems in the 748 and 787 lines. From the outside, their appears to be a major problem with Boeing management.

This is what Boeing needs, and is the smartest decision for them. The cost of a new airframe 797 would be too high for the market to bear right now, with not enough technology to provide the needed fuel-burn reduction required to make it viable.

HAL

One smooth landing is skill. Two in a row is luck. Three in a row and someone is lying.

Quoting flymia (Reply 3):AA took 260 A320s over 100 737s. Now if this 737RE does well then it is not a huge ball drop as it would even out with 200 737s and 260 A320s. But for now they dropped the ball. They needed to have something ready for AA. And now they need to make sure WN and DL like the 737RE.

I didn't realize this was an order contest, with the OEM that sells the most planes winning. Yes, it is probably disappointing to Boeing that AA ordered from Airbus, but there's no practical way Boeing could have taken the whole order.

Quoting micstatic (Reply 4):This shows one of two things. Overconfidence or a total lack of understanding of the marketplace. This combined with the massive problems in the 748 and 787 lines. From the outside, their appears to be a major problem with Boeing management.

Outside of the issues with the new programs, I fail to see how you can draw those conclusions based on selective quotes in press articles. We have no idea what type of conversations Boeing has been having with its customers.

A similar situation occurred in the early 90's when UA was attempting a fleet renewal. They wanted a 150 (ish) seat narrow body with Trans-Con range. All Boeing would provide is the 737-400, which didn't have the range (or hot/high performance) that UA wanted or the 757-200, which was too much airplane. Thus, UA turned to Airbus and the rest is history (the A319 and A320 order).

Quoting sxf24 (Reply 6):Outside of the issues with the new programs, I fail to see how you can draw those conclusions based on selective quotes in press articles. We have no idea what type of conversations Boeing has been having with its customers.

You are most certainly entitled to your opinion. It is a minority opinion. I can't connect the dots for you, but I can merely point out that it shows a CEO who doesn't seem to be in sync with the real world market. I'm critical of Boeing because I am a supporter of them. But it seems that the last 5 years in commercial aviation, has been overwhelmingly negative for the company. Not something I like to see. Of course I'm going to be critical.

Quoting sxf24 (Reply 6):
I didn't realize this was an order contest, with the OEM that sells the most planes winning. Yes, it is probably disappointing to Boeing that AA ordered from Airbus, but there's no practical way Boeing could have taken the whole order.

I agree that they could not take the whole order. But allow Airbus to enter AA like that and take much more of the order. And of course it is an ordering contest that is what their whole business revolves around

"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)

Quoting sxf24 (Reply 6):I didn't realize this was an order contest, with the OEM that sells the most planes winning. Yes, it is probably disappointing to Boeing that AA ordered from Airbus, but there's no practical way Boeing could have taken the whole order.

And Boeing still has 51 737-800s on order yet to be placed, so the actual Boeing total will be 155 and they already have 156 in place, so in the end, AA's narrowbody fleet will be 307 737s and 260 A320s.

So if you must have a "winner", it's still Boeing (not to mention Boeing will likely remain the exclusive widebody supplier to AA with their 777-300ER and 787-9 orders, MoUs and options).

What I see is a nice, balanced fleet with the 737 family working very well on short to medium haul narrowbody missions and the A320 family handling the TCON, TATL and high-density missions.

Quoting HAL (Reply 5): The cost of a new airframe 797 would be too high for the market to bear right now, with not enough technology to provide the needed fuel-burn reduction required to make it viable.

Exactly what John Leahy has been advocating for more then two years now. It is clear he did not drop the ball and pushed Boeing into the position to adapt the Airbus strategy.

The advantage is that both OEM's will switch to a completely new NB probably at the end of this decade with an EIS around 2025. This will mean that neither Airbus or Boeing can wait and see what the competitor is going to do as an all-new NB. Which will ensure exciting times to come for a long time, also out here on A-net. .

Quoting Stitch (Reply 10):So if you must have a "winner", it's still Boeing

Nice spin. However, 210 738s were already in placed or ordered, so today we have 260 firm orders for 32Xs and 97 not-yet firm orders for 737NGs, plus the "intent to buy" 100 737REs, when/if the plane actually on offer (and if AA likes it, I guess). Plus 365 signed options for further 32Xs, vs. 40 not-yet-signed options for 737NGs, and the "intent" for 60 options for 737REs. There is a clear winner here, no matter how you slice it.

I have long been a fan of Boeing, but I have come to the conclusion recently that unfortunately the Peter Principle had worked its insidious ways on Boeing. This is very unfortunate, because I have never seen a company with severe Peteritis recover; they either get bought out by someone else or collapse. I really do hope that Boeing recovers; we'll have to wait and see. But I am not encouraged. It does sound indeed that Boeing dropped the ball big time on this one; they did not have a competitive product and had to commit to one that has not yet been approved by the board. They should have made a decision when Airbus launched the NEO; then they could have battled this one out instead of being blindsided the way they were. Of course, I share the doubt expressed by others that AA will actually be able to take all of these planes; has any established airline ever succeeded in buying more planes than their existing fleet at once? We'll have to wait and see.

The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler

As I noted in the other thread, I don't think Boeing could have met AA's delivery terms even if they'd launched the 737RE the same day as Airbus launched the A320neo.

As-is, AA has just locked up almost 5% of Boeing's and Airbus' narrowbody production for a decade. If Boeing had landed the entire order, it would have soaked up 9% of Boeing's monthly production of the 737 for a decade.

I don't think Boeing have that much slack in their production line. Especially once WN, FR and others start placing their 737RE orders with similar delivery dates desired and the total climbs into the four figures.

If nothing else, AA gives Boeing an excuse to abandon the 797/NSA. They can rightfully say that some of their customers cannot wait until the 2020s for significantly more fuel-efficient planes and by moving to the 737RE, Boeing can save customers money sooner and allow them to continue to leverage their current investment.

Because if Boeing had pushed with the NSA/797, they probably could have kept some of their largest customers with them, but if they started to hit troubles or fuel really started to rise, those customers likely would have started movement to the CSeries and A320neo by necessity.

Quoting rl757pvd (Reply 13):Its my understanding that Airbus provided a level of financing that no bank in their right mind would provide to AA, I think if boeing thought it was a smart idea to beat it, they would have.

Yep, this is the way Airbus wins every single order. This and the subsidies, of course...

Instead, try that Boeing was so desperate to get something, anything, out of AA that they even committed to building a plane that doesn't even exist on paper and that has not been yet approved by Boeing's board...

But I don't really give a s**t either way. AA has put together a solid narrowbody fleet by choosing both families and I feel that was a well-placed decision.

Quoting UALWN (Reply 18):Is that a given? What about some of them ordering from Airbus or Bombardier or the Chinese or...?

Now that Boeing is effectively committed to a re-engine, that will be the logical choice for them. As we saw with AA, if the size of the order is big enough and the delivery dates are tight enough, we could see them add the A320neo to meet that demand, but I tend to think that their operating model will keep them with the 737RE and if Boeing can indeed increase production to 60 a year, that would provide enough capacity to meet their demands even with large triple-digit orders.

Quoting sxf24 (Reply 2):How exactly was the ball dropped, besides not publicly communicating every move for the benefit of A.netters?

I too, was feeling the same way, when the NEO was first announced. I was in the belief that just because Boeing has not come public with a true answer does not mean something is already in the works. I was even thinking, for that matter, they may just be waiting out Airbus to commit to the program to unvail the new narrowbody. Well, it's clear that Boeing was asleep at the wheel. If they truly has something to offer, the LOI wouldn't be an LOI from AA but rather an actual order.

I'm a Boeing fan, but that a customer says such things is clear evidence that Boeing senior management is out of touch with market reality.

Throw in the 787 and 747-8 production and delivery woes and I simply do not see how one can say Boeing senior management is capable of its number one task - maximizing shareholder value. I'd like to see a change.

I'm reasonably certain Boeing has been working on the 737 issue for years, not just spinning a ruler on a pencil in the executive suite. Now, do they look like they are a little slow on the trigger? Sure. But I suspect they do have a master plan somewhere. They aren't stupid....

As I said a month ago in reply to a poster claiming Boeing should offer an NSA and a 777NG ASAP:

Quote:Boeing cannot afford to launch either program currently, much less "both". Announcing something right now would simply be that, an announcement. Boeing cannot bring to bear any serious resources to start engineering & executing until 2014 sometime unless they borrow heavily from creditors and rapidly expand their engineering / employee resources which I simply don't see happening. BA stock would take a pounding.

That said, Boeing is fine! They aren't on the ropes or desperate. The most important thing B needs to do is get the 787 launched and ramped up which is still a HUGE challenge. Additionally, they must get the new US tanker project designed, built, and deliver 18 battle ready airframes by 2017. This is the reason B is telling the marketplace a new 797 program wouldn't start to deliver until 2019/2020, and why B has said it will take until the end of the year (or into next year) to decide on a response, if any, to the A320neo program.

Airbus had an "easy" choice. One that cost them $1 to $1.5 billion to launch, and which has already paid for itself in pending orders. Additionally, Boeing got a big win by winning the tanker contest which has taken precious resources for other possible programs. The aircraft market it too large, and too diverse to be all things to everyone and be able to offer brand new, cutting edge, multi-billion dollar programs at the drop of a hat.

Given the huge order volume and booming aircraft market, I think the best choice is to get the most fuel efficient aircraft to market in the next few years before the inevitable bust market for aircraft. This avenue also allows Boeing to then work on their 777X to have available for delivery within 18 months after the A350-1000 begins deliveries.

25 Stitch
: sxf24 made the comment that "I didn't realize this was an order contest, with the OEM that sells the most planes winning." I agree with him. I don't t

26 chuchoteur
: Actually I'd understood that Boeing had also put an equivalent level of financing on the table, hence why AA couldn't resist and ordered from both, s

27 Byrdluvs747
: I have always said that it was a big mistake for Boeing not to develop the Yellowstone project components in parallel. Its obvious today that the fail

28 Stitch
: They could barely get one of them out the door with one easy derivative (777 Freighter) and one complicated derivative (747-8) in parallel. If they'd

29 SEPilot
: They simply did not have the resources to do it. On top of that, did you really want all of the 787 cock-ups multiplied by 3?

30 mham001
: Much like the US loans, they have managed to buy their way into certain markets with floundering airlines. Time will tell how this works out.

31 FlyASAGuy2005
: For those intered, the call should be complete in about 10 minutes (these things usually only last about 30 mins). It's avalable here http://phx.corpo

32 redflyer
: They allowed their competitor to take away a huge chunk of their business with one of their most loyal customers. No matter how you slice this, it do

33 BMI727
: It isn't an order contest, it is a profitability contest. Market share means nothing if it does not translate to dollars. They didn't have much of a

34 SEPilot
: It certainly would have been a different story if Boeing had the 737RE ready earlier; they might not have gotten the whole order but they would have

35 WarpSpeed
: Smart people make wrong decisions all the time. Sometimes being too smart (over analyzing) can lead bright people to make seemingly correct decisions

36 BMI727
: Probably, but I'm not going to say that Boeing is wrong by waiting.

37 sxf24
: Yes, but a contest of earnings, not growth. For quite a few years, Airbus has delivered more planes to its customers but lower earnings (and returns)

38 Beta
: On the subject of top management at Boeing Co. I feel that ever since the late Phil Condit era to the current time, the quality of top management at B

39 jackhi
: This order presents a huge financial risk for Airbus. AA just lost another $268 million in the last quarter, a situation that continues to plague the

40 flyAUA
: As a user in the AA Order thread already [very precisely] pointed out "Airbus got caught napping with the 787 and Boeing got caught in a dead drunk co

41 UALWN
: I agree with your first paragraph, but I don't quite see how the second follows from the first. With the 737RE on the table, this would have been an

42 Stitch
: How can you know that with certainty? We're arguing projections here with both the neo and the RE, but those projections are pointing to the 737RE fa

43 FlyASAGuy2005
: You're still missing the point. If they were as far along as they SHOULD have been, AA would have a firm order for the type. Not, we will look at it

44 ikramerica
: Yes, I think management is inept. They keep replacing the head of this or that to try to fix it, but they are just cutting out one tumor to let anoth

45 sxf24
: I think you're reading too much into twisted words. But yes, you can't place a firm order for a product that is not for sale. Quite honestly, Boeing

46 Revelation
: I think that's right. Both McNearney and Albaugh have been making incredibly disjoint statements and have been kicking the can down the road in 3-6 m

47 UALWN
: I can't, but it's most likely. AA is ordering 130 32X-OEOs. Why? They've got plenty of 738s, and there's no real difference in performance between th

48 UALWN
: Since 1987, I believe. Deliveries extended into the mid 90s.